Air India disinvestment not anytime soon: Government to House panel

The Niti Aayog had submitted recommendations on the strategic disinvestment of Air India and five of its subsidiaries on May 12, citing the carrier’s monthly losses to the tune of Rs 200-250 crore as the primary reason why such a move is required.

The deadline for bids for the debt-ridden Air India expired on May 31 this year, and the Ministry of Civil Aviation did not receive any bid.

The government has told the Parliamentary Standing Committee for transport, tourism and culture that disinvestment of Air India is not going to be happening any time soon.

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The assurance, according to sources, came during a two-day meeting of the committee on August 29-30. This, sources said, is in line with the draft report that the committee has prepared on the disinvestment of the national carrier where it reportedly recommends that the Air India be given five more years to pull itself back on its feet. The government’s stand on Air India, though, puts the 17 BJP MPs in the standing committee who have, according to sources, put in a dissent note on the draft report, in a tricky situation. If that note is not withdrawn, the BJP MPs would end up looking like they are opposed to a decision of the NDA government.

The deadline for bids for the debt-ridden Air India expired on May 31 this year, and the Ministry of Civil Aviation did not receive any bid. “As informed by the Transaction Adviser, no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India. Further course of action will be decided appropriately,” the ministry had tweeted. That may have been reason why Civil Aviation Secretary Rajiv Nayan Choubey, according to sources, told the Parliamentary panel that disinvestment of the national carrier is not happening in the “near immediate future”.

The Niti Aayog had submitted recommendations on the strategic disinvestment of Air India and five of its subsidiaries on May 12, citing the carrier’s monthly losses to the tune of Rs 200-250 crore as the primary reason why such a move is required. Air India’s cash deficit, according to a submission by the Ministry of Civil Aviation to the Standing Committee on transport, tourism and culture, is expected to double from Rs 1050 crore in 2015-16 to provisional figures indicating a deficit of Rs 2069 crore in 2016-17. However, the committee, according to sources, feels that while the carrier should be given five years after its debts are written off, subsidiaries like subsidiaries like the ground handling business of Air India called Air India Transport Services Limited (AIATSL), Air India Express and Alliance Air and another joint venture of Air India with SATS Limited, called AISATS should not be disinvested.